The behavior and preferences of Asia Pacific consumers have changed profoundly amidst the emergence of the young affluent class and rapid penetration of ecommerce. When online retailing lures consumers with its speed and efficiency, retailers need to reposition themselves to ensure their brick-and-mortar establishments stay relevant; they need to attend to consumers’ needs and deliver more innovative and interactive experience.
The Flagship Store – the place for brand experience
Retailers have become more strategic in their store portfolio planning and management, with more CAPEX spent on upgrading their flagship stores to be the brand’s cultural center. For example, Gentle Monster, a sunglasses brand from South Korea, has adopted different design themes for each of its flagship stores across the world—for example, “Apartment” for Beijing, “Platform” for Hong Kong. This brand has distinguished itself from its competitors with unique in-store art features and exhibition-like product displays. Consumers find it more exciting and inspiring.
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Retailers should organize more interactive activities and events such as in-store sports classes or DIY workshops to strengthen consumers’ engagement with retail brands and encourage longer and more frequent visits.
Exercise More, Eat Healthier
Having an active lifestyle is increasingly popular amongst the younger generation and fuels the expansion of gyms and yoga clubs across the region. The running culture is exploding across the region with over 2,400 races to be held in Asia Pacific in 2017 and 2018. The Asia Pacific region saw a rising number of indoor sports clubs opening in shopping centers for alternative sporting activities, such as bouldering, archery, trampolines, skiing.
At the same time, young consumers are increasingly health conscious and are willing to pay more for healthier dining options such as GMO-free and organic food. To cope with the trend, F&B operators like Pret-A-Manger has introduced veggie-only branches and menus upon its past success of pop-up stores. In order to attract young consumers, Asian cuisine has also introduced new brands which offer dishes with smaller portions and lighter ingredients. MANA, SaladStop! and Max & Salad are some of the emerging green restaurants in the region.
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Learn from Play and Fun
In Asia Pacific, around 790 million people are aged 14 years old and below, resulting to growing business opportunities for children care, education and entertainment, especially since parents are now more willing to spend on their kids. Playgroups and kids’ gyms are gaining traction in the region. At the same time, children-targeted amusement parks and toy stores that advocate educational entertainment are very popular among kids and parents. Adult job role-playing groups like KidZania and its many other homegrown competitors are rapidly expanding, while toy stores such as Lego and Hamleys have opened larger stores to accommodate creative workshops and in-store entertainment facilities. However, countries like China are seeing rising concerns on oversupply issues due to the theme park construction boom by overseas groups and domestic operators such as Wanda and Happy Valley.
Joel Stephen is Senior Director of CBRE’s Advisory & Transactions, Retail business in Asia, based in Hong Kong. His team assists retailers with their expansion into and throughout Asia. They also work with the region’s leading landlords and developers bringing global advice to local markets. Joel moved to Hong Kong in 2014, having spent nearly five years in Shanghai, China, where he set up and managed the Retailer Representation team. Prior to that he was based in CBRE’s London office.